Here's what Amazon sellers can't stop talking about — and why that's great for Amazon

At a recent conference in New York City, professional Amazon sellers and consultants kept talking about one thing.

The topic that kept popping up: Fulfillment By Amazon, or FBA.

FBA first launched nearly 10 years ago to let businesses use Amazon's infrastructure to store and ship their goods, but it is still seen as one of the biggest opportunities for sellers right now, according to several people whom Business Insider spoke to as well as a panel of presenters talking about the "unwritten rules" of Amazon sellers.

Four of the five members of the panel answered a question about the biggest opportunity for sellers in the coming year by pointing to FBA.

"There are very few things in the world where you can say, 'If I just do this, my business increases 30 to 50%,'" Eric Heller, CEO of Marketplace Ignition, a company that helps businesses sell their goods online, said of FBA during the panel. "It's a huge opportunity."

By using FBA to let Amazon handle shipping logistics, sellers can cut their inventory and shipping costs (though Amazon does charge fees for the service) and make their goods eligible for Amazon Prime, the company's $99-per-year membership program, which offers free two-day shipping on more than 20 million items. The Prime aspect is a big part of what makes FBA so valuable for Amazon.

FBA is generally a hot topic in part because Amazon is investing in it heavily of late as it becomes a bigger part of its business. In its fourth-quarter earnings last year, Amazon said goods sold through FBA made up more than 40% of its third-party sales. The company also announced last summer that it would add six new fulfillment centers and more than 15 "sortation" centers in the coming year to help it improve shipping efficiency for both its own inventory and FBA goods.

One of the conference panels about "unwritten rules" for Amazon sellers. Jillian D'Onfro

The discussion of FBA at the conference was overwhelmingly positive, which is great news for Amazon.

Why? Because in addition to fees from third-party sales, FBA can provide a big boost to one of Amazon's most important businesses: Prime. The more businesses that use FBA, the more products Amazon can offer through Prime. The more Prime products there are, the more willing people might be to shell out $99 for a membership. And people with a Prime membership end up spending way more money on the site than other users.

Amazon has spent the past year amping up its digital offerings for Amazon Prime and investing in FBA because it banks on the fact that when it hooks people into its Prime ecosystem, it will make more money from their increased shopping.

"Amazon is investing in FBA right now," Heller says. "Amazon is using these things to drive up the frequency of purchases from Prime."

Despite the warm reception it received Tuesday, FBA isn't all sunshine and rainbows for merchants.

Victor Rosenman, CEO of FeedVisor, the company that hosted the conference, told Business Insider that the risks associated with using FBA were that businesses were handing over all their sales data to Amazon and that if they misjudge demand and send too much inventory to Amazon for FBA, it can be a very costly mistake.

"It's like a marriage," he says. "There are parts that are good and parts that are bad."